oil change and expected to be on my way in twenty minutes. But then they found something— the belts were worn and the car was unsafe to drive! Between parts and labor, the $ 20 service was now going to cost me $ 200!
While I was waiting for my service to be completed, I noticed other people having trouble with their vehicles. One woman needed brakes; someone else needed tires and wiper blades. In my short time there, I watched thousands of dollars of sales being generated that would not have been if the mechanic didn’ t suggest these needed repairs. It’ s important to note that these were legitimate sales. You could see the tires were bald on the one vehicle and that the woman knew about the brakes being low; she was trying to postpone fixing them for as long as possible. This means that even though many people knew they needed these services, they would not have made these purchases if the mechanic didn’ t urge them to.
This is a perfect example of why you can’ t allow your customers to dictate your revenue or purchase the amount of products and services that would benefit them most.
TWO SALES PROCESSES TO RAPIDLY GROW YOUR BUSINESS 1. A front-end sales process that aligns with marketing to generate interest and acquire the customer.
2. A back-end sales process that takes that customer and gets them to purchase as much as possible, as often as possible, for as long as possible.
If you look at your business in terms of front-end and back-end, then you can be very strategic about your growth and build processes accordingly.
Research shows that it is six times easier to sell to an existing customer than it is to sell to someone new. It is also true that the bulk of your marketing costs go into acquiring the customer. Therefore, not only is it much easier to get an existing customer to buy more, but it’ s also much more cost effective. With this information in mind, you will create a sales process to acquire customers( at the lowest cost possible) and then have a process to maximize that relationship, increasing the lifetime value of that customer. Your backend revenue( and the bulk of the profits) can only grow as fast as you can grow the frontend of your business.
FRONT-END SALES PROCESS: ACQUIRE CUSTOMERS Target your ideal prospects. Create a profile of who your ideal customers are. Keep the back-end in mind. Most likely, these are people( or companies) that will have the highest lifetime value. Your ideal prospects don’ t always have to be the most lucrative. If you are just starting out, you may want to target the customers that are the easiest for you to acquire so that you can establish your credibility in the market.
Generate leads or sales opportunities. It’ s vital that you create a process that will consistently generate opportunities for prospects to buy from you. Your front-end can only grow in proportion to the opportunities you create. Now that you know which people you are targeting, figure out what you can repeat to generate interest from them often.
Convert those opportunities. This may be your sales presentation, your initial consultation, or what happens when a prospect walks through your doors. Have a step-by-step plan that takes that initial interest and converts it into some sort of purchase. The initial purchase amount is not as important as the fact that they actually make a purchase. You can generate more sales in your back-end process, but your concern here is that you get them to complete a transaction. To accomplish this, you should make that initial transaction as easy as possible including starting with a small purchase so that the decision is an easy one.
Get referrals. You may ask for referrals at different points in the relationship. Every existing customer can bring additional customers, and business can grow exponentially. Have a process in place so that this is not left to chance.
BACK-END SALES PROCESS: INCREASE THE LIFETIME VALUE Increase the average transaction size. This is where your upsells and cross sells should come in. What other products or services should customers buy from you to get the maximum benefit of your offering? What can you bundle together to incentivize a larger purchase? When will you offer it? How will that offer be made?
Increase the purchase frequency. What can you do to get customers to purchase more frequently? Can you put them on some type of plan? Starbucks created incentives for people to come in after two o’ clock so customers who come in for their morning coffee now come back for their afternoon snack.
Keep them longer. The longer a customer continues to do business with you, the more you are multiplying the first two points and the more profitable this relationship becomes. Continue to add value, continue to build the relationship, and continue to get feedback.
What’ s more important than any of the points above is to have a process for each so that you are maximizing sales at every stage. The more it’ s repeated, the easier it becomes.
George Athan, CEO of MindStorm Strategic Consulting, creates highly effective sales processes to grow your business rapidly and massively. To learn more, go to www. Mind-Storm. com.
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